SKUtrak: What is Flow-of-Goods and why I should care

A lean supply chain needs comprehensive, accurate information to function properly. An agile supply chain requires accurate and timely information. Today's grocery supply chains need to be both lean and agile, requiring comprehensive, accurate information available for analysis in a timely manner. Daily data representing the whole supply chain - from production to till - is critical if retailers and suppliers want to work together to meet shopper demand.

But grocery retailer data systems are way off the pace. Whilst rich in data, they complicate the process of connecting different demand signals and their context. How many reports do you need to run on your retail customer systems to answer:

How many days stock cover do we have for product X?
How does this vary by depot and store?
Which depots are most at risk of stock outages? And which stores?
How does short delivery to depot Y impact availability?
Which promotions suffered reduced sales because of low depot stock?

To address these questions, and hundreds of others, you need to run multiple reports on retailer systems 7 days a week, and stitch together their contents to link to sales, waste, availability, distribution, store & depot stock and movements between you, customer depots and stores in order to understand how products flow through the supply chain in response to shopper demand.

Without this you react, rather than plan and execute, with predictable results:

Your on-shelf availability suffers, losing you sales and forcing your shoppers to chose alternatives > > potential sales are missed, brand perception suffers, retailer relationships are damaged, and demand for your products is throttled risking a slow, painful decline
You have too much stock in play, tying up cash unnecessarily, increasing storage costs and driving wastage > > money is lost to inflated working capital or waste penalties, relationships with your customers are damaged, so you lose listings and are denied opportunities for growth

Flow-of-Goods thinking removes the silos between account management, supply chain and revenue management to help all parties - at supplier and retailer - to better understand how the overall system behaves. Without it, you can't:

See how to respond to changes in demand
Allocate limited stock effectively across customers / depots
Work proactively to rectify issues / blindspots in your customers supply chains
Assess the validity of your customer's forecasts and plan production accordingly

Effective Flow-of-Goods analytics, using data and demand signals from across the supply chain, helps all parties build a better understanding of issues and opportunities so that you can agree on appropriate actions to address issues and capitalise on opportunities:

Combine and harmonise data across the supply chain and model it in a way that represents the real world; all information seen in the context needed to make sense of it
Link sales, availability, stock levels, orders and deliveries and compare with forecasts; move on from limitations of "EPOS analysis" to rich, detailed, contextual insight
Understand the true impact of supplier service levels on store availability and uncover depot service issues to help your customers better order, ship and stock your products in their stores
Evaluate, evidence and cost distribution changes to ensure that you advise your retailer customers on how best to meet shopper demand
Monitor the preparation, execution and impact of promotions - ensuring that you and your retailer customers meet true shopper demand, not just the demand that you were able to fulfil with the stock available

Upgrade your sales and supply chain mindset to Flow-of-Goods and provide lean, agile value-added service to your retailer customers as their trusted advisor. The SKUtrak platform has evolved around the Flow-of-Goods approach to grocery analytics; our customers:

Maintain lean stockholding whilst remaining flexible and responsive to changes in customer demand - minimising working capital for supplier and retailer
Understand stock-in-trade positions across multiple customers - enabling priority shipping of limited stock to maintain an optimum presence across regions
Monitor promotional performance tactically - ensuring appropriate stock builds, deployment in-store and reordering - so that retailer and supplier meet shopper demand
Become trusted advisors of their retailer customers, working collaboratively to ensure that the right products are in the right place at the right time